Opinion: Auditors refuse to sign off EU accounts – the latest untruth from the anti-Europeans

I’ve just been accused of issuing the dullest tweet of the week. Admittedly, “This week, the European Court of Auditors signed off the #EU’s [2012] accounts, as it has done annually since the 2007 financial year” is hardly the most exciting 133 characters ever featured on twitter, but with half-a-billion tweets emerging from the twitter fire hose daily, it was quite a condemnation.

But the point I made in that tweet is important. Why? Because this week saw another raft of accusations that – yet again! – the European Court of Auditors has refused to sign off the EU’s accounts.

The Daily Mail fumed that, “Auditors yesterday refused to sign off the EU accounts for the 19th year in succession”. The Express chipped in too, “for the 19th year in a row, the auditors refused to sign off Europe’s annual accounts”. Ukip MEP Paul Nuttall pounced on an opportunity too good to miss, tweeting: “EU accounts have now failed to be signed off for 19 years in a row”.

The only problem is that, err, it’s not true. A press release [pdf] issued by the European Court of Auditors (ECA) on 5th November stated, “As independent auditor, the ECA has signed off the 2012 accounts of the European Union, as it has done each year since the 2007 financial year”. The first part of the press release’s headline is a bit of a clue too: “EU accounts signed off”.

This sentence also appeared in the auditors’ press release: “In the ECA’s opinion, the consolidated accounts of the European Union present fairly, in all material respects, the financial position of the Union as at 31 December 2012, the results of its operations, its cash flows and the changes in net assets for the year then ended.”

The auditors didn’t give the EU accounts a totally clean bill of financial health. The ECA’s press release makes it clear that there are errors in EU spending, affecting a figure less than 5 per cent of what it pays out. It states however that this is not a measurement of fraud or waste, but rather where rules were not followed properly, e.g. when goods or services were bought without the proper application of public purchasing rules. A lot of the responsibility for this rests however with national governments and not with the men and women working in Brussels.

Speaking to a friend recently about how some sections of the media and anti-Europeans report the EU, I flippantly remarked that they must either be ignorant of the facts, perhaps wantonly so, or just happy to lie. It was a casual remark that upon reflection I think may be very close to the truth.

If you want more evidence then I suggest you read some of the Lib Dem Voice posts written by Giles Goodall, a friend and one of our European Parliament candidates; he’s illustrated time and again that the anti-European case is littered with this kind of thing.

It’s this ceaseless diet of anti-European rubbish that I find truly dull.

* Stuart Bonar was the Liberal Democrat parliamentary candidate in Plymouth Moor View.

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20 Comments

  • ‘The first part of the press release’s headline is a bit of a clue too: “EU accounts signed off”’

    In fact, the headline of the press release that you link to says: “EU accounts signed off, but errors persist in all main spending areas, say EU Auditors”. Also, the text of the press release says the error rate has gone up from 3.9% to 4.8% in the last year.

    The auditors say (in the same press release) “it is the ECA’s opinion that payments underlying the accounts for the year ended 31 December 2012 are materially affected by error.”

    Who is actually being selective in their reporting here?

  • Stuart Bonar 11th Nov '13 - 10:51am

    @Julian. I am not being selective, and the clue for that is this paragraph in my article above: “The auditors didn’t give the EU accounts a totally clean bill of financial health. The ECA’s press release makes it clear that there are errors in EU spending, affecting a figure less than 5 per cent of what it pays out. It states however that this is not a measurement of fraud or waste, but rather where rules were not followed properly, e.g. when goods or services were bought without the proper application of public purchasing rules. A lot of the responsibility for this rests however with national governments and not with the men and women working in Brussels.”

    The fact is the EU accounts are signed off, yet anti-Europeans persist in misleading people about this. Yes, the auditors did identify some errors (not necessarily fraud or waste, as they make clear), and I wrote an entire paragraph about that in my short piece.

  • As a europhile I’m greatly relieved that the EU have sorted this at last. Our task now is to campaign for the the EU to put into practice its stated commitment to subsidiarity, very much a Liberal tenet and…. dare I say it, likely to WIN US VOTES in the EU elections!

    The principle of subsidiarity is defined in Article 5 of the Treaty on European Union. It ensures that decisions are taken as closely as possible to the citizen and that constant checks are made to verify that action at Union level is justified in light of the possibilities available at national, regional or local level. Specifically, it is the principle whereby the Union does not take action (except in the areas that fall within its exclusive competence), unless it is more effective than action taken at national, regional or local level. It is closely bound up with the principle of proportionality, which requires that any action by the Union should not go beyond what is necessary to achieve the objectives of the Treaties.

    This stated EU aspiration needs putting into effect and decisions need devolving where possible to the Scottish Government, Welsh Assembly, English regions and local authorities. Let’s get campaigning on it!

  • This article makes absolutely no sense. If it’s such good news on the EU audit front as you suggest, then why is Herman Van Rompuy trying to get the auditors to tone down criticism, of the EU Finances?
    http://www.telegraph.co.uk/news/worldnews/europe/eu/10306461/EU-auditors-must-tone-down-criticism-of-Brussels-spending-says-Herman-Van-Rompuy.html
    Articles like this one, trying desperately to ‘put lipstick on the pig’, fool no-one.

  • Stuart Bonar 11th Nov '13 - 12:49pm

    @John Dunn. Okay, let me boil it down for you: the anti-European media constantly say that auditors refuse to sign off the EU accounts, leaving the average person with the notion that they bear no resemblance whatsoever to reality, and faceless Brussels bureaucrats are probably getting through the cold Belgian winter by burning piles of taxpayers’ money. In reality, the auditors are signing off the accounts and accepting that they are an accurate reflection of the “financial position”, “the results of its operations, its cash flows and the changes in net assets”. Those are facts.

    With regard to your link to a report in the anti-European Daily Telegraph, umm, my whole point is that I don’t trust any of the endless stream of anti-European nonsense they put out.

  • Giles Goodall 11th Nov '13 - 1:34pm

    Thanks Stuart for shedding light on this very common Euromyth. The fact is that 80% of EU spending is managed nationally and this is where most errors take place – including frequently in the UK. It’s no good blaming Brussels for errors in Barcelona or Bristol. It’s almost inevitable that some errors will always take place, just as they do in British and any other spending. But just because there are errors in UK benefit payments for example, that doesn’t mean we should wind down the entire welfare state (though some in the Conservatives and UKIP might like to do so).

    The other point is that the EU test is more stringent than that for British government spending, because hundreds of UK government accounts are signed off separately rather than in a single block, like the EU’s.
    A former head of the UK’s National Audit Office once said that if the UK had a similar test to the European one, he might have to qualify the whole of the UK’s central government expenditure.

    None of this means we shouldn’t strive for improvements at all levels to get better value for taxpayers’ money. Luckily, the European Commission proposed changes to improve accountability of how EU funds are handled by national authorities under the next financing period starting next year.

    I also very much agree with Leekliberal that subsidiarity should remain the watchword. Of course that means that national, regional and local government must also be held to the same high standards when they are handling money!

  • @Stuart Bonar
    “Yes, the auditors did identify some errors (not necessarily fraud or waste, as they make clear),..”

    I find that a very strange statement, may I suggest (being charitable) that if it is error then it is wasted money, however if it is fraud then it’s still wasted money. Can any right minded person not think that the following involves a waste of money:

    “… some land claimed and paid for as permanent pasture was in reality fully or partly covered with rocks, dense forests or bushes. This should exclude them from EU aid. In some of the cases the land may have once been used for an agricultural activity, but was found to have been abandoned for years”

    There are other examples given, so it is all very well doing a “sign off” and stating it is a true position, but the fact that the true position involves wasted money of circa 6-7 billion and provides the statement that:

    “For these reasons it is the ECA’s opinion that payments underlying the accounts for the year ended 31 December 2012 are materially affected by error.”

    Would show that said sign off struggles to be much more than a lukewarm endorsement. What is more worrying than the amounts (which are worrying enough), is the “Audited transactions affected by error” which would indicate a really cavalier attitude to tax payers money.

    There are certain tests to ascertain the level of indoctrination of either the pro/anti EU congregation, one of these can apply here I think. If this had been an audit of a Labour or Conservative Government, would you have used phrases such as:

    “A lot of the responsibility for this rests however with local councils and not with the men and women working in the Lab/Cons Government”

    In fact, would there even be an article like this, would we instead have articles screaming blue murder about waste during these times of extreme hardship for many?

  • Giles Goodall 11th Nov '13 - 3:41pm

    @Chris_sh: No, errors do not imply that money is wasted.

    If for example a bridge was built without correctly following procurement requirements, it may well be among the small minority of cases to be classed as an error. That doesn’t mean the money is wasted if the bridge has been built and is being used.

    Furthermore, if the rules are not properly followed at national level, money can be clawed back by Brussels, and this is regularly done.

    The key is in getting the right balance in the spending rules so that they are tight enough to ensure money is properly spent, but not so tight as to be impracticable (and potentially so unwieldy that they lead to expenditure becoming classed as having ‘errors’).

  • Stuart Bonar 11th Nov '13 - 3:55pm

    @chris_sh: I am not sure why it’s such a difficult statement to understand. The figure of 4.8% is for errors and not necessarily fraud or waste; “not necessarily” does not mean “absolutely not”. Some of that figure will be fraud, I am sure, and some will be waste, but all of it is not necessarily fraud or waste, e.g. some of it will be things like invoices not paid on time, missing paperwork or paperwork not properly signed. Those are listed as errors, but might be perfectly appropriate payments to make. To give a personal example, I couldn’t find a receipt once for a legitimate expense I had claimed on my corporate credit card, and I got my wrist (metaphorically) slapped for it … that was an error, but it wasn’t fraud or waste.

    Hopefully this explains why you are wrong to say that all the errors are “waste” (which the European Court of Auditors explicitly said).

    Look – the anti-European tabloids have said, time and again, that the auditor refuses to sign off the EU accounts; what I am proving in this piece is that that is nonsense. Am I saying every penny of EU funds is spent with perfect wisdom and propriety? No, just as no large organisation spends every penny with perfect wisdom and propriety. What I am calling for is honesty in the debate. I am not calling for everyone to love the EU.

  • Stuart Bonar 11th Nov '13 - 4:08pm

    FYI here are some other error rates:
    5.5% of £7.6bn worth of Pension Credit payments in 2012/13 were overpaid, and a further 2.1% was underpaid
    5.3% of £23.8bn worth of Housing Benefit payments in 2012/13 were overpaid, and 1.3% was underpaid
    4.6% of £5.5bn worth of Income Support payments in 2012/13 were overpaid; 1.1% underpaid
    4.2% of £5.3bn worth of Jobseeker’s Allowance payments in 2012/13 were overpaid; 0.3% underpaid

  • Nicholas Whyte says :
    “In addition, if the Eurosceptic press is to be believed, Britain is going to be forced to unite as a single country with France”
    No, Britain will not be forced into a single country with France, but all ‘supposed sovereign’ states that use the Euro currency, most definitely will. It’s already creeping its way into an EU superstate, crushing and usurping democracy at the country level. Evidence?. Greece democratically elect their government, only to be told, in no uncertain terms what they can and can’t do by an ‘..unelected..’, Mario Draghi.
    Wake up.

  • David Allen 11th Nov '13 - 7:27pm

    Careful reading of the Telegraph article cited above shows that van Rompuy is basically warning his auditors that they should take care not to write reports in a way that can be twisted and misrepresented by Eurosceptics. David Cameron, by replying “nonsense”, evidently became the first of the twisters.

    All bureaucracies make mistakes, are liable to fraud, and generate waste. We know of many recent examples from Whitehall. To presume that a Brussels bureaucrat must be less competent than a Whitehall bureaucrat is plain racist.

  • @Stuart Bonar
    “FYI here are some other error rates:..”

    You are being a little disingenuous there, on the one hand you’re talking about an overall budget (EU), but you’re then trying to compare that with individual elements from another (DWP), although the budgets are not far apart in size. You should, of course, have quoted the figures just above those (from the report), these showed an overall error rate which, as I’m sure you know, was 2.9% (however, these are estimates not the final result, if they are correct then it would seem the figures are fairly static compared to the previous period). Not brilliant but at least it’s not going up (as far as we know). Another interesting difference is that the UK report does break down the figures into fraud/claimant error/official error – so we know only .07% was caused by official error.

    @David Allen
    “To presume that a Brussels bureaucrat must be less competent than a Whitehall bureaucrat is plain racist.”

    Sorry, not only is that rubbish but it is the sort of comment that leads me to hope that the Lib Dems play no part in the proposed referendum campaign (unless I change my mind and decide to vote for out, in which case please carry on).

  • Stuart Bonar 11th Nov '13 - 9:17pm

    @John Dunn – that’s not relevant to my article so I’ll not comment
    @David Allen – good point
    @chris_sh – as the day is drawing to a close I shall be strict about what I reply to (we both have lives to live); my piece made the point that despite what the anti-European press says year after year, the European Court of Auditors signs off the EU accounts year after year; the anti-European press tell untruth after untruth and mislead the British people over Europe, and I am sick and tired of that; if you have something to say relevant to the central point of my article then please leave that comment; as things stand I shall not bother stretching out our petty spat over error rates any longer – ciao

  • The basic point here is (as Stuart Bonar has said) that error rates (an inevitability in any large organisation anywhere in the world) are absolutely nothing to do with “failure to sign off accounts”. The latter means that the Auditors report they have not been supplied with information sufficient for them properly to decide whether or not the accounts are a true and correct record. It is an absolute, total and deliberate lie for anyone to allege that this is the case with the EU accounts. End of story.

  • Peter Chivall 12th Nov '13 - 4:23pm

    It should come as no surprise that the owners of the rightwing press and their servile editors should wish to lie, lie and lie again to oppose our membership of a democratic European Union. After all, was it not the Daily Mail, still as far as I know, owned by the same family, that praised the Nazis through the Thirties and sought to appease Hitler (until it suited them to change sides). Likewise the Telegraph’s owners live on an island they own, governed by a medieval constitiution, which is part of the Kingdom of England, but outside the European Union, its democratically established laws and its taxes.

  • Giles Goodall 13th Nov '13 - 9:37am

    @Peter: Not to mention the Daily Express, owned by a pornographer and described by the Duke of Edinburgh back in 1962 as “a bloody awful newspaper. It is full of lies, scandal and imagination. It is a vicious paper.” It has not improved since then.

  • jedibeeftrix 17th Nov '13 - 1:39pm

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